You might be wondering why we have included age in the title? Well, it’s quite simple. Most people do achieve financial independence at some point in their life – it just takes them quite a long time. If you retire and you are able to rely on a private pension rather than a state pension, then you are essentially financially independent.
The trick is reaching this status when you are still young enough to enjoy it. Is this a possibility?
Set up a Plan
You might have seen blogs where people claim that they are 40% or 60% financially independent. What does this mean? It doesn’t suggest that they are partly free financially. Instead, these individuals have worked out exactly how much they need to save to reach financial independence and they have saved a set total of that amount. Typically, you won’t be able to make this calculation by yourself. Instead, it’s often worth speaking to a financial planner. They will put you on the right track here and ensure that you are taking all costs into consideration.
Clear the Debts
Before you start thinking about saving money towards this goal, you need to clear the debts that you have already accumulated. Unsecured debts are the most dangerous so these need to go first but then you can focus on secured debts too like the mortgage. There are lots of organizations that can help you clear your debts like DTSS. I know DTSS isn’t a scam but if you’re unsure it’s worth conducting your own research and getting more information. This will provide you with the peace of mind that you need.
Save a Little and Then a Lot
Once you have cleared your debts, you then need to think about saving money. You can start off by saving a little each month before quickly building it up to higher amounts. Ideally, you should be aiming to save about 25% of your income. While this might seem like a lot, remember, you’re working towards a long term goal here. Do be aware that having a second income is always going to help you save too. With a second income, you can use the new source of earning primarily as a source for savings.
Explore Passive Incomes
We know you don’t want to work every second and every moment of your life. That’s why you should make sure that you are looking at passive income options. The right passive income will make it easy to grow your money over time, building up the amount. Investments are the best option here and the property is the obvious choice because it doesn’t require any expertise to win big.
We hope this helps you understand that financial independence before thirty is not a pipe dream at all. It’s a real possibility and you just need to make sure that you are taking the right steps here. There are lots of considerations and factors to keep in mind. But if you make the right choices you will be able to solidify your financial position.